Noting at the outset that he had misjudged the "severity and duration of this panic", Biggs goes on to say that stock valuations are cheap and that global markets have been battered and "are deeply oversold". When combining these factors with the pervasive negative sentiment, he finds that we may soon see the setup for a significant bear market rally.

"The systematic work that we do on measuring sentiment (and we monitor about 20 indicators for the US and a dozen or so for other equity markets) show very extreme and in many cases record levels of bearishness. Obviously not every indicator is at an all-time high, and in some the history is short - but the message is powerful.

Furthermore, there is compelling evidence that investors, hedge funds, pension and mutual funds, and the public are not just talking bearish, they have raised astounding amounts of cash. I am chastened by the fact that all the data we look at are from the past 40 years, which was really just one great magnificent secular bull market of wealth creation marked by periodic bears that were opportunities to buy. No one knows what levels of pessimism were necessary to spawn the 40 per cent 1929 rally during a massive secular bear market. Nevertheless, I've never seen capitulation and despair like this. We must be pretty close to maximum bearishness."

Don't get too excited by Biggs' optimism; he notes that he is still hesitant to commit himself until he sees further signs of a bottom. However, for those waiting in the wings, looking for a more optimistic view for the stock markets, Biggs' note might provide some food for thought.

Onto our second guest forecaster, Marc Faber. Whereas Biggs is rather optimistic that the worst case scenarios for the global economy will not pan out, on this point Faber does not shy away from this reputation as "Dr. Doom". He says that the global economy is going into a severe recession, with emerging market economies being hit the hardest. In fact, during a recent Bloomberg TV interview, Marc said that the global economy "is imploding". He expanded upon these points in a seperate Bloomberg radio interview.In spite of this gloomy outlook, Faber says that a near-term rally is quite possible for shares, given their recent sharp declines. However, he cautions that traders will probably have to be alert and exit their positions in stocks and index futures by early next year. In fact, Faber's view of the next few months may also turn out to be a preview of the next decade for traders and investors. Marc recently told CNBC that we are now in "a traders' market", and that Warren Buffett's buy-and-hold approach to investing is dead for the next 10 years. What lessons have you learned from this latest bear market in shares? Are you taking the view of a trader, or that of a long-term investor in shares?